Logistics automation: 4 key factors to consider before investing

Investing in warehouse automation seems like the way to go, but how do you make sure the technology you choose will solve your issues and be future proof ?

Labor costs and availability

With the dramatic growth of online sales, companies are struggling to fill open positions in their warehouses, especially during peak season. Labor supply is becoming scarce as the pressure of high business instability and extremely aggressive competition makes work more difficult and raises productivity expectations.

Permanent stress, high performance targets and inefficient management systems lead to low productivity, errors, demotivation, and high turnover. This, along with the need to use temporary workers to absorb peaks in activity, results in high recruitment and training costs.

Investing in warehouse automation can help alleviate labor shortages by increasing the productivity of the existing workforce, provide a more flexible organization to absorb business fluctuations, and reduce tediousness by automating repetitive non-value-added tasks.

What should you consider when you want to solve your labor issues with warehouse automation?

• Automate tasks that have the highest potential impact on service level and customer satisfaction
• Involve employees in the transformation process
• Invest in training
• Differentiate between people and machines when setting productivity targets

Scalability and future planning

Market evolutions remain unpredictable and make it difficult to choose the right automation technology for current and future requirements. Moreover, the new technologies are new, and if the first applications are encouraging, their potential for future uses remains to be defined.

The challenges companies face when trying to establish a roadmap are a barrier to large-scale automation. In addition to a significant financial investment, this type of project also takes a long time, which requires a good vision of the future to avoid a change in company strategy that could jeopardize the project's sustainability.

What should you consider when investing in a future-proof automation system?

• Reliable forecasting models to define realistic growth scenarios
• Collaboration with strategic planning and finance teams from the outset
• A "modular" approach for a progressive and adaptable deployment
• Constant monitoring of factors that may impact the project

Also read :Three great reasons to enhance your warehouse with robots

Service level expected by customers

Logistics automation could be the key to customer loyalty. It allows for faster, more reliable and more efficient order management, resulting in lower costs and shorter delivery times. It also saves time and resources, creating the conditions for more flexible and resilient operations in the face of ever-changing expectations to deliver a consistently satisfying shopping experience.

However, the time scale for automation is not the same as that for customer experience. The fast and unpredictable evolution of consumer behaviors and expectations makes it difficult to perfectly match the promises of automation with the perceived improvement in service levels. This is especially true during the deployment period or major business changes, such as an expansion into new markets.

What should you consider when investing in automation to improve your service levels?

• Collaborate with sales and marketing to align customer journey and logistics 
• Manage ROI expectations based on realistic lead times and long-term KPIs
• Integrate resilience into automation systems
• Track service levels and implement a continuous improvement strategy 

Automation system sustainability

Investing in logistics automation is the result of a long-term vision of the company’s mission and objectives. Beyond the competitive pressures of constantly changing expectations, your system will have to sustain organizational changes such as relocation or the opening of new markets.

This means considering what the future may hold by choosing an automation technology mix that is flexible enough to be set up in existing warehouses on one hand, but on the other hand also taking into account the automation solution you chose in the company's expansion strategy. This will alleviate the difficulties of setting up new operations, mitigate the associated costs, and slow down the early obsolescence of your solution.

What should you consider to minimize the risks associated with the evolution of your organization when investing in warehouse automation?

• Logistics networks designed for easy implementation of automation technologies
• Partners rather than suppliers who have a track record in various use cases and a real capacity for innovation
• A multi-technology approach

GEODIS offers complete logistics services, from storage to order preparation, including transportation and optimized management of customer returns. With us, you benefit from a logistics partner that has invested in automation to better serve your customers.